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TMI Blog2022 (10) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... record. We find that the assessee is a private limited company engaged in the business of real estate development and construction. During the course of assessment proceedings, the ld.AO sought for furnishing of details of travelling expenses debited by the assessee in its profit and loss account. On perusal of the details furnished for travelling expenses totaling to Rs 24,23,407/-, the ld. AO observed that the same includes foreign travel expenses of Rs 11,55,326/-. Assessee was asked to justify whether the foreign travel expenses were incurred wholly and exclusively for the purpose of business. The assessee gave the complete details of foreign travel expenses in a tabular form containing the details of dollars purchased, visa fees, name of the persons who travelled including the directors of the assessee company, country visited, details of air fare and the purpose of travel thereon. The assessee submitted all the supporting documents for each of the aforesaid expenditure before the ld. AO. The list of persons travelled abroad includes directors of the assessee company (both husband and wife are directors), Architect and Advocate of the assessee company. Each place of visit is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with him while going on a personal trip abroad. This itself goes to prove that the foreign visits were purely meant only for business purposes and no personal purpose could be established thereon. Moreover, we hold that there cannot be any personal element of expenditure in a company as held by the Hon'ble Gujarat High Court in the case of Sayaji Iron & Engineering Co. vs CIT reporte din 253 ITR 749 (Guj) . In any case, the purpose of foreign visits is to be decided by the assessee company and the ld. AO cannot step into the shoes of the businessman and decide whether the foreign trips were required or not. Reliance in this regard is placed on the celebrated decision of Hon'ble Supreme Court in the case of CIT vs Dhanrajgirji Raja Narasingarji reported in 91 ITR 544(SC) wherein it was held as under:- Now, coming to the questions referred, it was urged by Mr. Ahuja, learned counsel for the revenue, that an expenditure incurred in connection with a criminal case cannot be considered as an expenditure coming within the scope of section 10(2)(xv) of the Act. He contended that an expenditure incurred in connection with a civil litigation can be given deduction to, if the conditions p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure. Every businessman knows his interest best. So far as the apportionment is concerned we are not told why we should not consider the same as a reasonable estimate. (emphasis supplied by us) For the reasons mentioned above, we vacate the order made by the High Court and in its place we answer the questions referred to in the affirmative and in favour of the assessee. The appeal is decided accordingly. Parties to bear their own costs. 2.3. When the assessee had furnished all the relevant details with supporting evidences together with the purpose of foreign travel, it is wrong on the part of the ld. CIT(A) to simply conclude that they were only pleasure tours and hence not meant for the purpose of business. The facts stated by the assessee supported by evidences were never controverted by the lower authorities or by the revenue before us. Hence in view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we direct the ld. AO to delete the disallowance made on account of foreign travel expenses in the sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also. Accordingly, the Ground No.2 raised by the assessee is allowed. 4. The next ground to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the disallowance of business promotion expenses of Rs 2,42,514/- in the facts and circumstances of the case. 4.1. We have heard the rival submissions and perused the materials available on record. The details of business promotion expenses were called for by the ld.AO which were duly furnished with supporting evidences by the assessee. The ld. AO observed that the evidences are only hotel bills of VIVANTA holiday village at Goa for three nights from 12.3.2012 to 15.3.2012, one night stay (24.9.2011 to 25.9.2011) at Ambey Valley City, Lonavala and the credit card payments made in the name of both Directors. The ld.AO observed that assessee had not furnished any information regarding meetings, conferences, presentation etc that had happened. Accordingly, he concluded that these are merely personal expenses debited in the company's profit and loss account and disallowed the entire sum of Rs 2,42,514/- in the assessment. This has been upheld by the ld. CIT(A). We find that the assessee had explained that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany would be entitled for depreciation u/s 32 of the Act . We direct the ld. AO to allow depreciation thereon to the assessee company. Accordingly, the Ground No. 4 raised by the assessee is allowed. 6. The next ground to be decided in this appeal is as to whether the ld. CIT(A) was justified in directing the ld. AO to recompute the income of the assessee to allow short term capital loss of Rs 11,11,636/- . We find that the assessee had claimed total loss as per Return of income at Rs 39,68,046/- , but the ld. AO while framing the assessment had started the computation with loss of Rs 28,56,420/-. We find that the ld. CIT(A) had only directed the ld. AO to verify the same and recompute total income of the assessee accordingly. Hence there cannot be any grievance for the assessee in this regard as it has already been addressed by the ld. CIT(A) and the matter is pending before the ld. AO. Hence the Ground No. 5 raised by the assessee is dismissed. 7. The Ground No. 6 raised by the assessee is only seeking TDS credit of Rs 6,31,863/-. This aspect has also been set aside to the file of ld. AO by the ld. CIT(A) to decide in accordance with law and it is pending before the ld. AO. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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